Theory Of Infrastructure Development In Nepal: P. Thapa

With the change in time and situation, the people's approach to developmental participation has been changing across the globe. People from all walks of life want to be included in all the developmental ventures tangibly or intangibly at least in their own country.

Nepal is no exception in this regard. Differences among the stakeholders in the distribution of shares in Upper Tamakoshi Hydropower Limited (UTKHPL) in the recent past could be a precedent. In simple terms, it can be said that for a greater stake in the UTKHPL, the people got agitated. To everyone's surprise, some enthusiastic poor locals of the project area took a few shares even by taking bank loans. When people are willing to invest in developing infrastructure, then why do we get so addled and squander our invaluable time in investigating imported modalities of financing our development projects?

Perception must change

With the passage of time, today's young workforce will reach old age, so if their hard earned money is not treasured on time, then a bulk of the population could become more of a liability than others for the country. Now, the time has come to change our perception about the investment modality. Citizens’ money should be invested in procuring and developing infrastructure and services. Financing patterns for our newly envisioned project like the Kathmandu-Terai Fast Track road or other hydropower projects should have been unrivaled compared to other old projects. The Ethiopian example would be more relevant to mention here.

Ethiopia is constructing the largest dam across the Blue Nile, the 'Grand Ethiopian Renaissance Dam' with a 6,000 MW installed capacity. It has set an ultimate aim to produce 8,000 MW of electricity in the future years. What is interesting about this project is that the Ethiopian government is financing the project on its own by selling bonds and collecting donations from within Ethiopia and abroad. Local people are in a campaign to buy the issued bonds. During the project’s start, many questions were raised regarding the success of implementing the project with people's money, but the will of the Ethiopian government and people have warded off every doubt by completing more than half the project work by this time.

But when we assess our own concerns, the much talked about issue, 'Channeling Nepal's hard earned remittance money into productive sectors' is yet to be realised. Till date, the lion's share of this money has been used to run the day-to-day affairs of an individual household, purchasing consumer commodities, mostly imported. According to Nepal Rastra Bank, Nepal's remittance income in 2013/14 increased to Rs. 543 billion compared to Rs 435 billion recorded in 2012/13. If this inflow further goes up, then in the next few years it will, undoubtedly, supersede the agriculture sector in terms of GDP contribution.

So, if we are to realise our full potential for hydropower and other infrastructure projects, then we need to set up a strong micro banking system. The Grameen experience of Bangladesh under Dr. Mohammad Yunus has brought exceptional change in the living condition of the poorest of the poor women across the country. Thus, micro banking should stand up for inclusive banking, imparting financial literacy to the unreached population and integrating the remittance providers and all other unorganised sectors.

Like in India, many of us have a mobile but not a bank account. So, mobile banking could be a great potential to achieve the target of 100% banking coverage. This will also provide social security to every household and help estimate and forecast the economic data more correctly. More bank accounts would also lead to an increase in the bank reserves.

With our current population, we have around five million households. If we were to channel Rs. 25,000 per year on average from every household through the proper banking system to infrastructure projects, then the total sum will be almost 24 per cent of our annual budget. According to the World Bank, Nepal needs around $18 billion to set up the basic infrastructure. If we are to change our status from a least developed to a developing country by 2022 then this figure could be four times more.

Domestic resources and remittance from abroad are not enough to meet this figure in a short span of time. But we can't look forward to a shower of FDI at the same time. The much-hyped Kathmandu-Terai Fast Track could be one example where we haven’t been able to attract foreign direct investment even after lots of endeavours. So, we could meet this amount from our own sources for a start, in addition, to setting a new modality on our own.

If we want Nepali people to have control of their own destiny, then we need to develop such a mechanism through which some portion of their duly earned money can directly go to national development. This will help to provide security to the volatile elderly as our government is not in a position to provide pension to every aging citizen for many decades to come.

If we continuously miss to capitalise on the remittances in terms of capital formation, then our future will be quite uneasy, making our economy more dependent on international migration and vulnerable to external economic crises. Though we don't have a reliable device to monitor the total inflow of remittance, but going through the different papers, it can be said that more than 50 per cent of Nepal's total remittance is transferred through the informal channel. This is due to mainly two factors: a) underdevelopment of the financial sector in the rural areas b) limited financial literacy among the rural people.

It is also an undeniable fact that we are continuously misapplying remittance money at the cost of our own skilled and semi-skilled labour, victimising agricultural and other prospering sectors due to the short fall of such a workforce.

The time has come to devise a legal framework via different schemes to leverage remittance. We must enhance our capacity in the use of digital technologies because for any task to meet its target there should be well synchronisation of assets, ideas and technology. The decades-old share distribution technique of the UTKHPL is not encouraging for those migrant communities who couldn’t make their physical presence at the time of such activity.

Mobile banking

Still we are adopting the same old technique for share management that was adopted for Nabil Bank or erstwhile Nepal Grindlays Bank (before its merger with Standard Chartered Bank) 30 or so years before. So the concept of e-banking or mobile banking, with 100 per cent banking coverage across the country, must be introduced to reserve one's share or bond in any developmental project. We can call this the theory of our infrastructure development. If we further miss the opportunity to employ remittance money for the country's development then giving a facelift to this country will only be limited to paper.